Editor’s Note: This perspective was originally published in InsideSources.com on Aug. 11, 2026.
Congress allocated $50 billion through the One Big Beautiful Bill to improve rural healthcare. Many states have identified maternal and infant health as a priority for this funding, and for good reason: most rural hospitals no longer deliver babies.
Whether these dollars improve maternity care will depend less on Washington than on state reform. As the Centers for Medicare & Medicaid Services rolls out the Rural Health Transformation Program, states should use this opportunity to expand access to certified nurse-midwives and licensed birth centers to address the maternity-care shortage in rural America and to move low-risk pregnancies into lower-cost, high-value settings.
America’s maternity care system is expensive, hospital-centered and increasingly inaccessible, especially for low-income families. Medicaid finances 41 percent of all U.S. births, including nearly half of rural births, making it the dominant payer for maternity care. Nearly all Medicaid births occur in hospitals, the most expensive setting for delivery.
At the same time, more than 500 hospitals closed obstetric units from 2010 to 2022, especially in rural America. Fewer than 1 percent of births occur in licensed birth centers, despite federal law requiring Medicaid coverage of certified nurse-midwife services and care in licensed birth centers.
Hospitals remain essential for complicated pregnancies and emergencies, but a large share of low-risk births can be safely managed in lower-intensity settings. Treating these pregnancies in high-cost hospital settings drives up Medicaid spending without improving outcomes. Evidence shows that nurse-midwife-led care for low-risk pregnancies is significantly less expensive: Medicaid birth-center care costs $1,163 less per delivery, and total childbirth costs for midwife-managed low-risk pregnancies are $2,262 lower.
For otherwise healthy pregnancies, hospital delivery can also increase unnecessary interventions and related risks. By contrast, midwife-led care in non-hospital settings typically involves fewer medical interventions, emphasizes non-pharmacologic pain management, and improves patient experience.Mothers consistently report higher satisfaction, more personalized care, and greater support when midwives lead the care team.
The benefits extend beyond delivery. Evidence from the CMS Strong Start for Mothers and Newborns Initiative, which tested enhanced prenatal care for more than 45,000 women, found that birth centers achieved substantially lower rates of preterm birth, low birthweight and cesarean deliveries. These improvements translate into fewer complications, shorter recoveries and reduced infection risk.
Better prenatal care may also reduce admissions to neonatal intensive care units, which are among the most expensive services in the healthcare system. NICU stays cost five times more over a child’s first two years than standard newborn care.
Despite strong evidence and mandatory Medicaid coverage of certified nurse-midwife services and licensed birth centers, these models remain rare because state policies restrict their supply. In many states, nurse-midwives face physician supervision or collaborative agreement requirements that limit independent practice, especially in rural areas.
More broadly, evidence shows that advanced practice clinicians can safely deliver high-quality care within their scope, yet state policy often reflects outdated assumptions about physician-only models. MACPAC has identified inadequate payment, fragmented licensure, restrictive scope-of-practice rules, physician collaboration requirements, and certificate-of-need laws as central barriers to expanding access to midwives and birth centers.
Recent Georgia litigation challenging physician oversight laws for certified nurse-midwives shows how these restrictions can narrow options amid severe maternity-care shortages.
States should use these funds to expand certified nurse-midwife and licensed birth-center capacity for low-risk pregnancies. That means raising Medicaid payment rates enough to make nurse-midwife-led maternity care financially viable in rural communities, removing physician supervision and collaboration requirements that restrict nurse-midwives’ practice, and repealing certificate-of-need laws that limit birth-center licensing. States should also require Medicaid managed-care plans to contract with qualified nurse-midwife-led maternity providers.
OB-GYN concerns about malpractice liability and higher insurance premiums when collaborating with nurse-midwives and birth centers are real and can discourage referrals and partnerships. These concerns are a secondary barrier, not the root policy problem. Once states ease supply restrictions, Medicaid plans and provider organizations will have stronger incentives to develop referral, transfer and liability arrangements for low-risk pregnancies.
These reforms would not replace OB-GYNs or hospitals. Instead, they would allow them to focus on high-risk pregnancies while shifting low-risk births to more appropriate, lower-cost settings. They would also address maternity-care shortages in rural America. The result could be a rare policy win-win: better experiences for mothers, healthier babies and lower Medicaid spending. The Rural Health Transformation Program provides the resources. What remains is the policy vision to use them wisely.
